1.  We have audited the attached Balance Sheet of TIPS INDUSTRIES
 LIMITED as at 31st March 2012 and the Statement of Profit & Loss and
 the Cash Flow Statement of the Company for the year ended on that date,
 annexed thereto. These financial statements are the responsibility of
 the Company''s management. Our responsibility is to express an opinion
 on the financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the Auditing Standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003, issued
 by the Central Government of India in terms of sub- section (4A) of
 Section 227 of Companies Act, 1956, we give in the Annexure a statement
 on the matters specified in paragraph
 
 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph
 (3) above, we report that:
 
 (a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 (b) In our opinion, proper books of accounts as required by the law
 have been kept by the Company so far as it appears from our examination
 of these books.
 
 (c) The Balance Sheet, Statement of Profit and Loss and the Cash Flow
 dealt with by this Reports are in agreement with the books of account.
 
 (d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement comply with the Accounting Standards referred to in
 sub-section (3C) of Section 211 of the Companies Act, 1956.
 
 (e) On the basis of written representations received from the Directors
 as on 31st March 2012 and taken on record by the Board of Directors, we
 report that, none of the directors is disqualified as on 31st March,
 2012 from being appointed as a Director in terms of clause (g) of Sub
 Section (1) of Section 274 of the Companies Act, 1956.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, they said accounts read with the notes
 thereon give the information required by the Companies Act, 1956, in
 the manner so required and, give a true and fair view in conformity
 with the accounting principles generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2012,
 
 (ii) in the case of Statement of Profit and Loss, of the profit for the
 year ended on that date, and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Referred to in paragraph (3) of our report of even date on the accounts
 of Tips Industries Limited for the year ended 31st March 2012
 
 (i) FIXED ASSETS
 
 (a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 (b) The Company has carried out physical verification of fixed assets
 in accordance with the verification programme. According to information
 and explanation given to us and in our opinion, discrepancies noticed
 on such verification were not material and have been appropriately
 dealt with in the books of accounts of the company.
 
 (c) In our opinion, the disposal of fixed assets during the year does
 not affect the going concern assumption.
 
 (ii) INVENTORY
 
 (a) As explained to us, inventories were physically verified during the
 year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management were generally reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories.
 
 (iii) LOANS AND ADVANCES GRANTED /TAKEN FROM CERTAIN ENTITIES:
 
 (a) The Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act.  Accordingly, paragraphs 4(iii)(b), (c)
 and (d) of the order are not applicable.
 
 (b) According to the information and explanations given to us, during
 the year ended March 31, 2012 the Company has taken unsecured loan from
 five parties covered in the register maintained under section 301 of
 the act, aggregating to Rs 195 lacs. The maximum amount of loan
 outstanding during the year was 535 lacs and balance outstanding at the
 end of the year is Rs. 260 lacs.
 
 (c) According to the information and explanations given to us, in our
 opinion, the rate of interest and other terms and conditions of
 unsecured loans taken from parties listed in the register maintained
 under section 301 of the Companies Act, 1956 were not prejudicial to
 the interest of the Company. The repayment of principal and interest is
 regular.
 
 (iv) INTERNAL CONTROL SYSTEM
 
 In our opinion and according to the information and explanations given
 to us, there are adequate internal control systems to commensurate with
 the size of the Company and the nature of its business with regard to
 purchases of inventory, fixed asset and with regard to the sale of
 goods and services. During the course of our audit, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the internal control system.
 
 (v) CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE
 COMPANIES ACT, 1956:
 
 (a) Based on audit procedures applied by us, to the best of our
 knowledge and belief and according to the information and explanations
 given to us, we are of the opinion that the particulars of contracts or
 arrangements that need to be entered in the register maintained under
 section 301 of the Companies act, 1956 have been so entered.
 
 (b) In our opinion and according to the information and explanation
 given to us, in respect of transactions which have been made in
 pursuance of contracts or arrangement entered in the register
 maintained under Section 301 and exceeding the value of Rs.5,00,000 in
 respect of any party during the period, we are not in the position to
 compare the prices with the prevailing market prices or prices charged
 to other parties as there have been no other such purchases or sales of
 exact type of goods, materials or sales of services and hence we have
 relied on managements representation as to reasonableness of such
 prices.
 
 (vi) ACCEPTANCE OF DEPOSITS:
 
 The Company had accepted deposits from the public and in our opinion
 and according to the information and explanations given to us, the
 directives issued by the Reserve Bank of India and the provisions of
 section 58A and 58AA and the relevant provisions of the Companies Act,
 1956 and rules framed there under, where applicable, have been complied
 with. We are informed that no order has been passed by the Company Law
 Board or National Company Law Tribunal or Reserve Bank of India or any
 court or any other tribunal.
 
 (vii) INTERNAL AUDIT SYSTEM:
 
 In our opinion, the company has adequate internal audit system
 commensurate with the size and the nature of its business.
 
 (viii) COST RECORDS:
 
 The Central Government has not prescribed maintenance of cost records
 under section 209(1)(d) of the Companies Act, 1956 for any of the
 products of the Company.
 
 (ix) STATUTORY DUES:
 
 (a) According to the records of the Company and information and
 explanations given to us, the Company is generally regular in
 depositing with appropriate authorities undisputed statutory dues
 including Provident Fund, Employees State Insurance, Income tax, Sales
 tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other
 material statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
 Tax, Service Tax, Customs duty, Excise duty and Cess are in arrears, as
 on 31st March 2012 for a period of more than six months from the date
 they became payable.
 
 (c) According to the information and explanations given to us, there
 are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom
 duty, Excise duty and Cess which have not been deposited on account of
 dispute.
 
 (x) ACCUMULATED LOSSES:
 
 The Company has no accumulated losses as at 31st march 2012 and it has
 not incurred cash losses in the financial year ended on that date or in
 the immediately preceding financial year.
 
 (xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS:
 
 According to the information and explanations given to us and based on
 the documents and records produced to us, the Company has not defaulted
 in the repayment of dues to any Financial Institutions and Banks.
 
 (xii) SECURITY FOR LOANS & ADVANCES GRANTED:
 
 According to the information and explanations given to us, the Company
 has not granted any loans and advances on the basis of security by way
 of pledge of shares, debentures and other securities.
 
 (xiii) SPECIAL STATUTE:
 
 In our opinion and according to the information and explanation given
 to us, the nature of activities of the company does not attract any
 special statute applicable to chit fund and nidhi/ mutual benefit
 fund/societies.
 
 (xiv) DEALINGS/TRADING IN SHSRES, SECURITIES, DEBENTURES AND OTHER
 INVESTMENTS:
 
 The Company does not deal or trade in shares, securities, debentures
 and other investments.
 
 (xv) GUARANTEES GIVEN:
 
 The Company has given guarantee for loans taken by Managing Directors
 from banks aggregating to Rs. 28.55 lacs as on balance sheet date.
 According to information and explanations given to us, the terms and
 conditions of guarantees given are not prima-facie prejudicial to the
 interest of the company.
 
 (xvi) TERM LOANS:
 
 According to information and explanation given to us, term loans
 obtained were applied for the purpose for which the loans were
 obtained.
 
 (xvii) UTILISATION OF FUNDS:
 
 According to the information and explanations given to us, on an
 overall examination of the Balance Sheet and the Cash Flow of the
 Company, we report that the company has not utilized funds raised on
 short-term basis for long-term investment.
 
 (xviii) PREFERENTIAL ALLOTMENT OF SHARES:
 
 During the year, the Company has not made any preferential allotment of
 shares to parties and companies covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (xix) SECURITY FOR DEBENTURES ISSUED:
 
 The Company has not issued any debentures during the year.
 
 (xx) PUBLIC ISSUE OF EQUITY SHARES:
 
 During the year the Company has not raised any money by way of public
 issue.
 
 (xxi) FRAUDS NOTICED:
 
 During the course of our examination of the books and records of the
 Company, carried out in accordance with the generally accepted auditing
 practices in India, and according to the information and explanations
 given to us, we have neither come across any instance of fraud on or by
 the Company, noticed or reported during the year, nor have we been
 informed of such case by the management.
 
                                                  For B. K. Khare and Co.
 
                                                   Chartered Accountants 
 
                                           Firm Registration No. 105102W
 
                                                          Sunil Bhandari
 
 Place : Mumbai                                                  Partner
 
 Dated : May 18, 2012                               Membership No. 37388